How To Minimise Last-Minute Cancellations By Tamara Reid

Are last-minute cancellations at an all-time high in your salon? You’re not alone. Here’s how a deposit policy can help you steady the ship and protect your revenue during these topsy-turvy times.

As we enter year three of the pandemic (but who’s counting?) it’s become clear that the business impacts of Covid aren’t going away, they’re just changing.

While Covid rules and restrictions might have eased, case numbers are still high. Plus, this year the flu is back with a vengeance, which has meant that the number of last-minute cancellations from clients experiencing flu-like symptoms has skyrocketed.

Cancellations are more than just annoying for business owners; they can have a big impact on your bottom line. If you own your own business, the buck stops with you. It’s more important than ever to protect your revenue and sometimes, you need to be your own superhero.

There are steps you can take to safeguard your revenue – and the most effective step is to request a deposit on booking. Businesses that take a deposit reduce their no-show rate by 55 per cent – so we know this option works. The good news? Salons that use Timely Business Management Software can use TimelyPay to set up deposits and automate the booking process.

REVISITING YOUR DEPOSIT POLICY

When it comes to deposits, the theory is this: that by asking a client to put down a deposit on booking (somewhere between 10 and 70 per cent of the total price) you’re protecting your cash flow in case they don’t show up. At face value, deposits sound great (and that’s because they are great, but more on that later); yet many business owners feel anxious about introducing a deposit policy because they don’t want to a) create more work or b) upset their clients. Requesting a deposit can reduce no shows by weeding out clients who aren’t committed to their booking. “I like taking a deposit because it protects my income,” says Emily Harper, founder of Brows by Emily Harper, who introduced a deposit policy and hasn’t looked back. “I’ve found that people only pay the deposit if they are serious about coming. Since implementing deposits, I hardly get cancellations and when I do it’s always for a legitimate reason.”

THE MORE DETAIL THE BETTER

If you decide to go down this path, you’ll need to double down on the details. Do you want to implement a flat fee deposit, a percentage per service or a combination of both? From there, you’ll need to decide whether you take a deposit for all services or just the top-tier ones. And what would you consider a reasonable time frame for a client to cancel or rebook an appointment (i.e. 8, 24, 48, 72 hours)? How much would you charge per late cancellation?

COMMUNICATION IS KEY

Whether you’re implementing a deposit policy for the first time or updating an old one, you’ll need to let your regulars know that your process has changed. You could do this via your website, social media or at the time of booking. If you don’t like the word ‘deposit’, try flipping the script by labeling this payment as a ‘booking fee’ instead.

Steve Moore, business coach at BOSS - Bring On Salon Success and co-founder of Moore Beautiful, says that his team will speak to a client ahead of their appointment to secure the allocated booking fee.

If you need a script, the conversation usually starts like this: “Because we value your time and ours, we do require a $50 booking fee to secure your appointment, is that okay?” You can then reassure clients by telling them that the fee will be deducted from the total cost. “Most clients love this as it means they have to pay less on the day,” Steve shares.

While there will be a transition period at first, your clients will get used to your salon’s new policy. “The fact that we take booking fees is now so ingrained in our guests that they usually have all their details ready before they call us to make an appointment. Booking fees are an industry standard now and guests are already prepared to be asked to pay a fee to secure their appointments.”

THE LEGAL SIDE OF THINGS

What do you need to know, legally-speaking? Rochelle Castro from RC & Co Lawyers says you’re well within your rights to enforce a deposit policy. Here, she shares a few words of wisdom: On the unlikely event of losing a client: “Business owners should not worry about losing clients by asking for a deposit… Not only is this practical, it is also fair for a service provider to require a deposit upfront.” On what to do if a client does not show up: “It is important that business owners communicate to their clients why the deposit is being made and what would be the reason why part of the deposits may not be returned.” On communicating your policy clearly: “A deposit policy is useful to a business owner if it is succinct, to the point and it is communicated to a (potential) client clearly and prior to providing the service.”

SETTING YOURSELF UP FOR SUCCESS

Timely-powered businesses can automate their deposit policy at the booking stage. Timely allows salons to take online bookings and secure deposits either through their website or social media (Instagram and Facebook). Businesses with TimelyPay have complete control over how they take deposits. They can choose which services require deposits, set flat booking fees, charge a percentage or require full payment up front; they can even ask clients to save cards securely into their Timely account - there are a range of flexible options to suit any type of deposit policy! The client will be prompted to make a payment to secure their appointment, then they’ll pay any outstanding balance on the day of their service.

We could have never predicted how the Covid pandemic would continue to impact beauty businesses in 2022. However, what we do know is that technology can help us weather the storm. Is it time to revisit the deposit policy for your business?

By Tamara Reid, Timely’s Head of Partnerships.